The President of White House Hotels, Austin Eruotor, an expert in hospitality, shared experience on hospitality business in Nigeria in the last decade while speaking with OLAJIDE FABAMISE on why the standard of the industry is poor unlike what it is in Ghana, Benin Republic, Togo and Cote d’ Ivoire, countries in the West Africa sub-region. Excerpts:
What are the challenges that give rise to low standard in Nigeria’s hospitality industry?
There are several factors that contribute to the low standard the hospitality business is undergoing. Though there is a huge improvement compared to what used to happen in the 90’s. But basically, government policy has impacted negatively on everything we do. For instance banking, the interest rate is as high as 25 per cent to 30 per cent.
In the next 10 years ?
We want to see a change in Nigeria; I want to see a five star hotel. Each time I travel abroad I always come back with something. We have to keep on improving until we get there.
White House at 10 how is the business?
First and foremost, media has been fantastic to White House and without your (media) support, we couldn’t have got to where we are today. From inception, you have always been with us. It has been a very long journey, but we thank God because 10 years is not a joke to stay in business in a country as tough as Nigeria and where government is not ready to support businesses. It is even tougher when you don’t have access to regular public power supply. There are other factors militating against the business particularly the hospitality business in Nigeria. However, we are still in business and I believe we still have more years to go. In the past 10 years, we have grown steadily despite numerous challenges. Like a journey of one hundred miles that starts with a step, we have got many steps forward now. From the Toyin Street we are now in Ikeja GRA and we are looking out for several opportunities to have our brand in many cities. So, we are still going, we thank God for that.
Have you realised the objective of setting up this business?
We started with entertainment and event, but today we have a full hospitality bouquet. We are not just at Toyin Street, we are at GRA Ikeja. This is our major flagship at the moment and we are still trying to go to other places like I said earlier. So far, we are moving forward. When we came here (Toyin Branch), we started with the ground floor, and after five years, we acquired the whole building. Prior to this time, we didn’t offer accommodation here but today we have a 30-room accommodation facility here in Toyin Street. As part of growth mechanism, we have now moved to Ikeja GRA, which is a bigger facility compared to Toyin Street. There is no type of activities we can’t host in the Ikeja GRA facility. It is world-class and everyone wants to be there. We have government officials, ministers, governors, senators, businessmen and expatriates who come there on daily basis. The corporate world is not left out too. This means that we are gradually achieving the objectives we set for ourselves some 10 years ago.
Nigeria is being regarded as the new frontier for global economy, how has this imparted on hospitality industry?
If you look around today, there are so many hotels coming up in almost key cities of the country. When we started at Toyin, you could simply count the number of hotels here, though many could only pass as guest houses, but today, we have some international brand on this street. At Ikeja GRA along Joel Ogunaike, we were only four, but today we have about 14 hotels on that stretch alone. There are four hotels under construction as we speak. So, Nigeria is a big market and so many brands, mainly international are coming to Nigeria. These brands have now realised that and they make a lot of money in Nigeria because of our population, our oil industry and we have a lot of other mineral resources that encourage investments. Many investors in the world are realising that Nigeria is a place to be despite our security challenges. And when you look at American economy, they are not doing well, and Europe economy is at a standstill. Nigeria has become a beautiful bride of the world economy; there are a lot of opportunities, which do not exist in America and European countries. Nigeria is the place to be now. Everybody is coming to Nigeria in spite of all the negative publicity we get. For instance, Nigeria is the only place in the world that you can make 100 per cent or more of your investment. But the locals do not realise this. We don’t appreciate what we have. The whole world is coming here. It is just our government that needs to change their attitude then you will see Nigeria at the forefront.
What is responsible for Nigeria’s huge Return on Investment (ROI)?
I think the government is still far behind, a lot of things are not in place, we don’t have infrastructure in place. Our laws are weak on foreigners. Nigerians do not get things easily the way other nationals get it here. The government still lags behind. Our financial policies is faulty, foreign investors pull their fund from abroad and invest seamlessly where local investors would find it difficult. In Nigeria, a bank would prefer to grant foreign investors facilities despite the fact that he or she does not need it, but locals would sweat to get one quarter of what is given to a foreigner. These are the possible reasons that return on investment in Nigeria is very high compared to other markets and countries. So there are a lot of opportunities here.
How are you going to pay back let alone make profit to stay in business?
Power supply is a big issue in Nigeria. For instance Ghana and Benin Republic have constant public power supply and they can’t afford to compromise on standards because they don’t have any reason to do so. If I tell you huge amount we spend on diesel per month, you will be surprised and think it is unbelievable. Country doesn’t develop faster with generator power. The money used for diesel is supposed to be used for training and others things that will improve standard. We are using the money to buy diesel and generator. Generator is supposed to be a backup, but public power is a backup here. Imagine not having power supply for one week and nobody is doing anything about it. Other African countries have the facilities on ground and their population is not as big as ours. Look at this business for example if I am in an organised economy, we would have been all over Nigeria by now. The bank will support me. Other African country are more organised than Nigeria.
How do hotels get funding despite high interest rate?
From the private investors, we have a lot of foreign brand coming to Nigeria, they have now realised that Nigeria is a goldmine. When you look at the average rate of hotel accommodation in Nigeria compared to Europe, Nigeria is very high. Nigerian hotels are very expensive because we don’t have infrastructure. Some of this foreign brands that come here are very low brand in their countries but when they get to Nigeria, they become a very high brand. What they are charging for instance $30 to $40 in Europe, they are collecting N29, 000 to N30 000 in Nigeria. So, all of them want to come here. What they make here, they can never make such money in their country. What they make in 10 years over there is what they are making in one year in Nigeria.
Do we still have a 5-star hotel in Nigeria?
When you look at hotels in Nigeria, can you tell me about anyone that has more than 200 rooms ? You can count them even in Lagos. Can Nigeria host the Olympic today? Certainly no, it is not possible because we don’t have enough standard hotel accommodation. If we are to host Olympic today and two million people come to Lagos, how are we going to accommodate them? Anybody can claim a 5-star hotel but I know the industry is still far behind a 5-star standard.
When you are in the hospitality business you meet the good, the bad and the ugly. You have to find a way to manage them. The challenge I have majorly are the marketers. Sometimes, I employed marketers, some of them are graduates, and one is even a lawyer. They work with me like three months, no one could bring business and they were collecting money. They collect N10, 000 every week for transport but couldn’t bring business. But we have overcome all that now.
What are you giving back?
I am giving just a little back. When you look at the country from what I was saying about leadership before, we are all leaders, Everybody must give a little back to the system.
What it is your succession plans?
My dream is to have children that will overgrow me maybe after 100 years; not just only my son. I have people that work with me. The biggest assets are the people who work with you every day. People who work with you every day are like your family. We have a plan, not just for my son. The problem we have in Nigeria today is recycling of people. You have to allow vibrant people who are young to take over. I have the same vision for others to take over people who are strong to build this brand.
What is the place of our food in Africa hospitality industry?
It depends on who is coming in. Some foreigners want to try our food. I have white people that drink pepper soup. But when you are operating hospitality business, you provide for everybody, not just your country food. You have to be international. That is what tourism is all about. When you travel abroad you will see Nigerian restaurants where they sell Nigerian foods. I have many Indian and Chinese customers, I have to get their food. If I don’t, they will go to another place. Don’t forget there is competition in this business. You have to market to get customers. One good thing about Nigeria is that when you have a good product, you must sell. Good products will enable you to survive competition.